Maximizing Investment Tax Credit Transfer:
Value, Liquidity & Efficiency
Why is the ITC data valuable for ITC buyers?
1. Verified ITC data & documents ensures you're purchasing eligible tax credits.
2. High speed & efficiency while purchasing tax credits
Why is the ITC data valuable for ITC Sellers?
1. Easy access to ITC bridge financing.
2. Receive maximum value and avoid large discounts/hair-cuts
3. High speed & efficiency while selling tax credits
4. No need to provide additional guarantees
5. Access to low-cost transfer credit insurance
What is Transferable Investment Tax Credit?
The Internal Revenue Agency (IRA) introduced a provision that allows project owners including tax-exempt entities, to transfer the Investment Tax Credit (ITC) to an unrelated third party, provided the amount paid for the tax credit is in cash.
- The transferred credit is not included in the transferee's gross income and is not tax-deductible for the transferor.
- The election to transfer tax credits must be made before the tax return due date in the year of determination, and transferred credits cannot be further transferred.
These transfer rules may significantly impact project financing as sponsors may opt to monetize the ITC rather than involving tax equity partners.